When Renting A Car, Read The Fine Print

July 20, 1986|By Paul Grimes, New York Times

NEW YORK — What the auto-rental business calls ''free'' is often not free at all.

For example, according to a brochure describing a tour package arranged by Extra Value Travel of New York, two people traveling together who fly to Spain on Iberia Air Lines can rent a subcompact car from Avis -- an Opel Corsa, say -- for a week ''free'' with unlimited mileage. The brochure says so in large type on pages 1 and 3. Much smaller print on the back page, however, says that the offer ''does not include sales tax, CDW, PAI or refueling service charges, which must be paid directly to Avis at time of rental.''

On inquiry you will learn that the sales tax -- or value-added tax, as it is commonly called in Europe -- is 33 percent in Spain. It is calculated according to what the car rental would cost if it was not ''free.'' According to John Britton, a spokesman at Avis world headquarters in Garden City, N.Y., based on an Avis subcompact weekly price of 17,360 Spanish pesetas (about $122 at a recent exchange rate), the tax would be about $41.

Add to that about $13 a week for optional personal accident insurance (PAI) and $30 a week to be relieved of financial responsibility if the car is damaged (CDW, for collision damage waiver), plus tax on those items, and the ''free'' rental costs about $88.30 plus the cost of gasoline.

As car-rental prices go, this shapes up as a good deal, but it is one of many illustrations of the importance of understanding the financial implications when you rent a car. As with the airlines, competition among auto-rental companies is extremely intense. Many genuine bargains are around, but it can take a lot of comparison shopping to determine which company offers the best deal, and even which of a single company's deals is best.

Under another recent offer, Pan American World Airways advertised a restricted summertime fare of $99, one-way, between New York and Los Angeles or San Francisco, based on round-trip purchase at least 30 days before departure. ''Plus Free Rental Car!'' the ad said. ''Just go to the Alamo Rent- A-Car counter at the airport,'' the ad said, ''show your Pan Am tickets and boarding passes for two people traveling together and you'll get an economy car for a day free -- with unlimited mileage, so you can travel anywhere you want. (Additional days are only $19.95 each).''

The ad didn't say so, but so-called open-jaw travel is permitted at the $99 fare. This means that the outbound flight from New York can be to San Francisco and the return flight from Los Angeles or vice versa. How you get between the two California cities is your business, not Pan Am's, but one option is to leap for the ''Free Rental Car'' from Alamo.

If you do, you will find that cars, which must be reserved at least three days in advance, are subject to availability -- and two-door economy cars, or subcompacts, which are specified in the offer, are not always abundant enough for demand.

Upon pickup you will be charged $9.95 up front for 9 to 10 gallons of gasoline (the company suggests that you return the car with the tank virtually empty). If you opt for the collision damage waiver, the current rate is $8.95 a day. Personal accident insurance is $3 a day more and the sales tax is 6 percent if you rent the car in Los Angeles and 6.5 percent in San Francisco. Add all this together and a one-day Los Angeles rental under the Pan Am offer would total $23.21.

If you attempt an open-jaw trip, however, picking up the car in San Francisco, say, and dropping it off in Los Angeles, you will face an additional one-way rental fee of $60. Under the Pan Am offer, that amount is the same in either direction. But if you are not a flier and rent from Alamo, the drop-off charge will be $60 from Los Angeles to San Francisco but almost three times as much -- $175 -- from San Francisco to Los Angeles.

All prices quoted here are subject to sudden change, depending on market pressures, and fly-drive packages are not always available.

Usually they are substantially cheaper than other rentals because they offer reduced rates at least, and the ''free'' deals relieve you of the basic car charge. In California, for example, Alamo normally charges a basic $27.99 a day, plus extras, for an economy-car rental at Los Angeles and $26.99 a day at San Francisco.

If you are planning to rent a car wherever you fly, it is important to ask about fly-drive packages when shopping for your air tickets. Cars usually must be reserved before you leave home, although you can cancel without penalty if you change your mind -- something you can often not do with air tickets these days.

No matter where or how you rent, here are some points to keep in mind: